This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Biotech Stock Mailbag: Transcept Pharma

Returning to reality, investors are bidding up Spectrum shares in anticipation of the company's second-quarter earnings in the middle of August. Shrotriya has already said publicly to expect "record" revenue for the June quarter, fueled once again by Fusilev colon cancer drug sales because generic leucovorin -- Fusilev's competition -- is still in short supply in the U.S.

None of this should be a surprise to anyone. The leucovorin shortage is only just now letting up with Teva (TEVA) and Bedford Labs beginning to replenish supplies. This benefited Spectrum with Fusilev largely the only option in the colon cancer market for the second quarter, just like it was in the first quarter.

Spectrum reported first-quarter Fusilev sales of $34.6 million and total revenue of $44 million. There's no reason to think second-quarter sales will be lower. If anything, Spectrum needs to record a sequential gain in Fusilev sales and total revenue for the second quarter.

I fully expect Spectrum to "pre-announce" second-quarter earnings later this month or in early August, just like the company did in the first quarter. I'm not the only one anticipating this transparent stock-promotion scheme, judging by the recent ramp in the stock price. By the way, "real" earnings pre-announcements are issued right before or at the quarter's end, not two or three weeks later. Spectrum operates from a different playbook.

The current analysts' consensus for the second quarter has Spectrum earning 15 cents a share on total revenue of $37.25 million, which is lower than first-quarter revenue, thereby totally ignoring Shrotriya's statement about expecting "record" revenues in the second quarter.

Lazy analysts.

Investors better hope Spectrum does as well in the second quarter as Shrotriya has promised because the company faces significant headwinds once leucovorin is readily available, giving U.S. doctors a cheaper and equally effective alternative to Fusilev.

More tweets. @gregtucker21 asks, "PFS events happening later is a good sign for cabo and EXEL, yes?"

Yes, maybe. No, maybe.

On Wednesday, Exelixis (EXEL) said it expected a three-month delay in reporting top-line results from a phase III study of cabozantinib in medullary thyroid cancer. Delaying the announcement of results until September-October is necessary because progression-free survival events are not coming as fast as previously expected, Exelixis said.

Optimists will assume that the delay in PFS events is being caused by cabozantinib patients performing better than expected, thereby increasing the odds that the study comes out positive.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,202.83 -76.91 -0.45%
S&P 500 1,994.94 -15.46 -0.77%
NASDAQ 4,521.7740 -58.0150 -1.27%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs